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Just look at the hardware specs.

They have several theories. First, they theorize that because Apple sells most of their units through their own retail outlets, Apple can sell for a lower margin. But then, those retail outlets are not cheap. Then they theorize that Apple controls the hardware and the software–but then chalk it to Apple being willing to take lower profit margins on the pieces of the components.

But no-one looks at the design of the iOS operating system.

Apple created an operating system that is quite usable without multitasking, with an API which encourages fast switching applications in and out of memory. Because they don’t encourage the use of interpreted languages, and because they make heavy integrated use of the on-board GPU, they don’t need as much computing power to run most typical applications. The API also encourages the use of callbacks in a single-threaded event loop, which allows quickly idling the CPU when needed. And the OS runs in a very small memory footprint.

What this means is that the Apple iPad can run very well with very few resources: the Apple iPad uses only 256mb of RAM (as opposed to the Motorola Xoom’s 1gb of RAM–and God help you if you try to run Windows in that memory footprint), and the base model ships with only 16gb of flash memory: the same amount of flash in a cheap keyring flash drive.

Because Apple controls the software and because they control the hardware, they can also use a more integrated approach to reducing the part count in their iPads: my guess is that they are perhaps even looking at putting the RAM into the same wafer as the Apple A4 CPU. Never underestimate the cost savings of reducing chip count, as Steve Wozniak knew. Each chip that has to be mounted is an additional cost during design and manufacturing, and an additional chip that consumes energy and releases heat.

Apple’s iPad hardware is perfect for Apple’s iOS operating system and development environment. But if you were to try to run Android or Windows on a similar memory footprint, you’d have something that is sluggish and slow–Windows wants to run multiple processes and Android wants to kick off threads like crazy, which explains the hiccups you see when you try to run either on a Netbook computer.

For someone to compete with Apple, they would need to design an operating system which makes the compromises necessary to run on an inexpensive operating system–including enforcing development policies (such as no multi-process multi-tasking) that allow those compromises. That would allow them to reduce the chip count, memory requirements and CPU requirements that would allow them to create a much more inexpensive motherboard and reduce the battery size while maintaining battery longevity.

And unfortunately there is no-one currently out there who even sees the problem, much less is striving to find the solution to these problems.

If I were Google, I’d hire some CPU people and some CPU fabrication time, and figure out how to put the Davlik instruction set on a chip. Then I’d license the CPU design to anyone who wants to build a low power, but fast, Android phone.